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Pre-meeting summaries for the May IASB meeting

09 May 2019

The IASB will meet in London on 14–16 May 2019 to discuss nine topics. We have posted our pre-meeting summaries for the meeting that allow you to follow the IASB’s decision making more closely. For each topic to be discussed, we summarise the agenda papers made available by the IASB staff and point out the main issues to be discussed by the IASB and the staff recommendations.

The Board will consider three “sweep issues” related to its package of amendments to IFRS 17 Insurance Contracts. Additionally, the staff provide a summary of the discussions of the Transition Resource Group for IFRS 17 (TRG) meeting held on 4 April 2019. (See our IFRS in Focus for a summary of the meeting)

For goodwill and impairment the staff are responding to issues raised by the Board in April in relation to possible new disclosures that the acquirer of a business would be required to provide to help a user assess whether a business combination was a good investment decision and whether that business is performing as expected. The papers include a discussion of ways to present equity (or net assets) excluding goodwill. The staff are also proposing that the Discussion Paper propose that the requirement for an annual test for impairment of goodwill and intangible assets with an indefinite life staff be removed and an indicator-only approach be used.

One of the threads in the Disclosure Initiative is a targeted Standards-level review of disclosure requirements. The Board has been developing internal guidance for setting disclosure requirements which it decided to test on IAS 19 Employee Benefits and IFRS 13 Fair Value Measurement. The staff present summaries of the outreach they have been undertaking since November 2018 and the different approaches they plan to take when reviewing IAS 19 and IFRS 13 disclosures.

For Primary Financial Statements, the staff are recommending that the Board develop an Exposure Draft for a new IFRS Standard to replace IAS 1 Presentation of Financial Statements, and that a Discussion Paper is not required.

The staff will present a summary of the feedback received on the Exposure Draft Onerous Contracts—Cost of Fulfilling a Contract. (See our IFRS in Focus for a summary of the ED).

Now that the IASB has published a revised Conceptual Framework, the IASB is considering whether IAS 37 Provisions, Contingent Liabilities and Contingent Assets should be revised. The staff are recommending that the Board align the definition of a liability in IAS 37 with the definition in the Conceptual Framework, including potentially replacing IFRIC 21 Levies with new requirements and illustrative examples in IAS 37. They also recommend that the Board clarify which costs to include in the measure of a provision and specify whether the rate at which an entity discounts a provision for the time value of money should include or exclude the entity’s own credit risk.

There is an education session for Rate-regulated Activities at which the staff will ask the Board for any suggestions to improve the understanding and clarity of the model that has been developed thus far.

The staff set out their approach to revising the Management Commentary Practice Statement and recommend that the Board provide additional guidance on the objective of management commentary, how to consider qualitative characteristics of useful financial information when providing management commentary and the content of management commentary.

The staff recommend that the IFRS for SMEs Standard should be aligned with new and amended IFRS Standards. The alternative would be to provide a stable platform that is updated only for specific problems brought to the Board’s attention. If the Board decides to take the recommended approach the staff set out ways to phase in updates. The staff also discuss IFRS 16 Leases to identify ways to simplify the requirements for SMEs.

More information

Our pre-meeting summaries are available on our May meeting notes page and will be supplemented with our popular meeting notes after the meeting.